NASSCO appears close to winning big contract

The USNS Montford Point will be launched November 13.
— Howard Lipin / U-T San Diego

General Dynamics-NASSCO will launch the first in a new class of Navy auxiliary ships this week, boosting spirits at a company that says it may soon also be celebrating a major order for commercial container vessels.

NASSCO President Fred Harris says he is "cautiously optimistic" that he'll strike a deal with a so-far unidentified customer by the end of this year, sustaining, and possibly growing, the company's 3,100-person workforce.

Harris' comment comes as NASSCO is preparing for the launch of the 765-foot Mobile Landing Platform (MLP) ship Montford Point, which is scheduled to be floated into San Diego Bay on Tuesay, less than a year after the vessel's keel was laid. The “pier-at-sea” will be used as a staging area for the Navy and Marines. Other ships will off-load supplies and equipment to MLPs for transfer to shore.

NASSCO is contracted to design and build three MLPs at a cost of $1.3 billion. The Obama administration has included funding for a fourth in its budget. The ships are part of the Navy’s effort to pre-position supplies so it can more quickly respond to a crisis or threat. Montford Point also was designed to pick up and transport large ships, such as a destroyer. The Navy didn’t have that capacity when the Cole was attacked by terrorists in 2000 and had to hire a foreign contractor to move the ship from Yemen to the U.S.

Navy construction and repair contracts have enabled NASSCO to keep its standing as the last major shipbuilder on the West Coast. But the company also needs commercial work, especially since it finished building the last of 14 dry cargo ships for the Navy earlier this year.

American Petroleum Tankers (APT) recently announced that it will pay NASSCO an undisclosed sum to build two double-hull tankers. But that work turns on whether APT can borrow money from the federal government. The order would sustain 500 jobs for 2-3 years at NASSCO.

Harris emphasized that he's also been pursuing other deals, one of which may be almost done.

The company has a reputation for building and repairing large ships on time and on budget. During a visit to NASSCO in May 2011, Navy Secretary Ray Mabus said, “For the last two years I’ve been talking about acquisition excellence, which is just a fancy way of saying we need to get more ships, cheaper, for the Navy. I’ve been talking about the need to do things right, to get the contracts right, about the yards taking ownership of projects, learning lessons while ships are being built, and bringing in every ship of a class cheaper and faster than the ship before it. NASSCO has done that. NASSCO has been a tremendous partner.”

The company also has received lots of praise from Tim Colton, who writes the influential blog Maritime Memo. He has called NASSCO the “best of the ‘Big Six’ shipbuilders. But he’s also raised questions about the company’s financial stability due to its struggles to land new commercial work.